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ETF roundup: BAML reports big rise in high-yield ETF inflows

ETF roundup

Structured Products staff

21 Feb 2014

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Inflows into credit funds through the exchange-traded funds (ETFs) route have risen dramatically this year, according to Bank of America Merrill Lynch. With a weekly combined average inflow of $240 million for high-grade and high-yield funds, total inflows for 2014 are now in excess of $1.4 billion, driven by a 9.8% year-on-year increase in money going into high-yield ETFs, with 3.3% finding its way into investment grade ETFs. The combined credit ETF inflow in the second week of February was the highest in 16 weeks. Equity funds saw inflows quadrupling in the first half of February to almost $4 billion, the thirty-third consecutive week of inflows.

Global exchange-traded product (ETP) outflows of $9.7 billion during January were driven by equity redemptions of $10.8 billion and diverged from the strong starts seen in the past two years, according to BlackRock.

North American investors have reacted to the challenging start to the year by pulling more than $20 billion from domestic ETFs, with the first six weeks of 2014 on track to make this the worst quarter for US listed fund flow in more than five years, according to Markit. However, Europe-focused funds have bucked this trend and have seen more than $5 billion of inflows.

In January 2014, global ETF/ETP assets fell by 3.2% to $2.32 trillion, based on negative market performance and net outflows of $7.6 billion, according to preliminary findings from ETFGI's January 2014 global ETF and ETP industry insights report.

iShares listed its Euro Stoxx 50 ex-Financials Ucits ETF on Euronext Amsterdam on February 11. The fund is the first ETF in continental Europe to utilise an international security structure, whereby settlement of transactions takes place exclusively at Euroclear Bank - the Brussels-based international central securities depository.

Assets under management in short and leveraged ETPs reached a record $56 billion at the end of January, up $0.9 billion (1.7%) from the December figure, according to London-based ETF provider Boost.